GINKLORU GANGAREDDY,RAMPURA VILLAGE vs. INCOME-TAX OFFICER WARD-1, CHITRADURGA

This appeal at the instance of assessee is directed against CIT(A) order vide DIN & Order No.ITBA/NFAC/S/250/2023- 24/1058835434(1) dated 18.12.2023 for the assessment year 2020- 21.

Facts of the case are that the assessee in the present case is running a proprietary concern and engaged in the business of distributorship to Reliance Jio and Sun Direct under the trade name of “Shri Maruthi Agencies”. The assessee filed original return on 2.11.2020 declaring total income of Rs.5,47,610/- for the assessment year 2020-21. The case was then selected for complete scrutiny under CASS on the ground that assessee has claimed large commission expenses and shown low net profit. The only issue the Ginkloru Gangareddy, Rampura, Chitradurga Page 2 of 4 assessee has raised before us that the commission and brokerage received amounting to Rs.26,54,109/- although declared as part of sale credited to Profit & Loss account, but the ld. AO on the alleged ground that the assessee has not responded to the show cause notice and in the absence of clarification/evidence, the commission receipt of Rs.26,54,109/- was added to the total income of the assessee. Before us, the assessee has raised following grounds:

The ld. CIT(A) although agreed on the fact that the said commission brokerage of Rs.26,54,109/- shown as part of sale, but he dismissed the ground Nos.1(a), 1(b) & 1(c) on the basis that the assessee has failed to explain and justify as to why the commission shown as a part of sales by the assessee. In absence of proper justification and considering the facts of the case, ld. CIT(A) has considered the addition made by ld. AO to be justified and deserve to Ginkloru Gangareddy, Rampura, Chitradurga Page 3 of 4 be sustained and upheld. Aggrieved by the order of ld. CIT(A), the assessee filed this appeal before us. 3.1 During the course of proceedings, the ld. A.R. argued before us that during the course of assessment proceedings, all the books of accounts along with various details were submitted as mentioned in para 3.2 of the assessment order. The ld. AO has agreed that the assessee has claimed the commission receipt as sales, whereas as per form No.26AS, these are reflecting as commission and contract receipts, which is reproduced as under:

We have heard the rival submissions and perused the materials available on record. The main issue in dispute is with regard to inclusion of Rs.26,54,104/- commission received in the income of the assessee, which is subject to TDS. The ld. D.R. submitted that this amount is not part of the sales disclosed by the assessee in its books of accounts. Hence, it is to be brought to tax separately. Contrary to this, the ld. A.R. submitted that this was the part of sales shown in the Profit & loss account. In our opinion, this fact is required to be examined at the end of ld. AO for which assessee has to furnish the Form No.26AS and to reconcile with the sales and Ginkloru Gangareddy, Rampura, Chitradurga Page 4 of 4 commission received by the assessee. With this observation, we remit this issue in dispute to the file of ld. AO for fresh consideration. 4.1 Regarding ground No.2, no argument has been put before us, hence not considered for adjudication and the same is dismissed.

In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 15th Apr, 2024